When a business faces a denied cyber liability insurance claim, the financial consequences can be severe. Cyber liability insurance covers costs from cyberattacks and data breaches, but insurers sometimes deny these claims. Knowing common legal strategies and how to dispute these denials is important for businesses to secure the benefits they deserve.
Analyzing policy language
The first step in disputing a denial is to carefully review the policy. Business insurance policies are often complex, with terms that may be unclear. Businesses should examine whether the denial stems from a misinterpretation or ambiguous clause. It is important to identify any vague language and argue that the policy should favor the insured.
Challenging the denial
Insurers frequently deny claims by citing exclusions, such as specific cyber incidents not covered by the policy. A key strategy is to demonstrate that the cited exclusion does not apply to the incident in question. For example, if an insurer denies a claim based on an exclusion for “insider threats,” the business can argue that the breach was not caused by an insider, rendering the exclusion irrelevant.
Providing evidence of compliance
Another strategy involves showing that the business complied with all policy requirements. This includes following cybersecurity protocols, reporting the incident promptly, and providing all necessary documentation. Presenting clear evidence of compliance strengthens the case against the denial.
Moving forward
Disputing a denied cyber liability insurance claim requires a thorough understanding of the policy and the ability to challenge the insurer’s reasoning. By employing these legal strategies, businesses can improve their chances of securing the compensation they deserve and protect their company’s financial interests.